House prices increased by 0.3% increase in October, the sixth monthly rise in a row, reports LSL Property Services /Acadametrics House Price Index.
Year on year house price growth slowed to 6.1%, and is expected to slow further as the small increases in 2010 fail to match the larger gains of a year ago.
The average house price now stands at £224.709.
And the number of transactions in October rose by 2% in the month, but will be down 7.3% compared to last October.
This is the first month this year in which transactions are lower than 2009 levels.
Richard Sexton, director of chartered surveyors e.surv, part of LSL, says: “House price growth may have been marginal over the last six months, but the housing market has shown a surprising resilience in the face of strong headwinds.
“The dearth of mortgage finance is still reining in potential purchases and lenders are actually dropping LTVs for lower-value buyers, which is hitting first-time buyers disproportionately hard. Future repayments to the government top the list of lenders’ priorities, and they aren’t likely to loosen their purse-strings any time soon. While house prices and transactions won’t nose dive, we don’t expect them to rocket up in the foreseeable future. “
Sexton adds that for cash buyers – or those with a big enough deposit – the market presents an attractive opportunity.
Peter Williams, executive director of the Intermediary Mortgage Lenders Association and chairman of Acadametrics, says the variety in house price indices is not surprising while the market is bouncing along the bottom.
He says: Last month Halifax reported a revised 3.7% fall which was an outlier result compared to other measures. This month Halifax shows a 1.8% rise, the quantum of which is presumably counteracting last month’s figures. Meanwhile, the Rightmove index, based upon asking prices and thus a forward measure, is reporting a 3.1% increase. Given what we know about the market at present this may reflect an optimistic stance amongst sellers.
“By contrast, our current annual rate of growth at 6.1% reflects past price changes rather than activity in more recent months and, on the assumption that the market does not change significantly for the remainder of the year, the annual rate will decline to approximately 4.0% by December. We anticipate that some, but not all, of the regions in England and Wales will be showing falling prices on an annual basis by the end of the year.